Key Takeaways
- • Co-investment demand surged to 92% of managers (up from ~70% in 2023), signaling a sharp acceleration in institutional investor appetite for direct deal participation alongside fund commitments, according to the ACC/Dechert 'Trends in Private Credit Fund Structuring 2025' report.
- • Liquidity expectations nearly doubled: 64% of managers now report rising investor demand for liquidity (up from 49% in 2023), with two-thirds of surveyed managers offering at least one vehicle with periodic redemption options, compared to approximately half in 2023.
- • Private credit managers control ~$1.5 trillion in assets and are systematically restructuring vehicles to accommodate institutional, retail, and insurance capital; 63% of managers have evaluated rated note feeders specifically for U.S. insurance allocations.
- • Retail and high-net-worth investor participation accelerated: Over 50% of managers currently serve retail clients, with two-thirds targeting retail capital in new fund launches, reflecting market maturation beyond institutional-only structures.
- • Leverage deployment remains conservative: 72% of managers employ leverage (typically 1.0–1.5× NAV) in private credit strategies, either at fund or asset level, with Luxembourg, Cayman Islands, and the U.S. remaining dominant domiciles.
Summary
The private credit market is undergoing structural evolution as managers respond to shifting investor preferences on liquidity, co-investment flexibility, and customized solutions. New research from the Alternative Credit Council (ACC) and law firm Dechert, published October 6, 2025, provides the second edition of their 'Trends in Private Credit Fund Structuring 2025' report, surveying 50 private credit managers representing approximately $1.5 trillion in assets under management.
The most significant finding concerns co-investment appetite, which has surged dramatically. Ninety-two percent of managers now report increased investor demand for co-investment opportunities alongside fund commitments—a sharp rise from approximately 70% in 2023. This 22-percentage-point year-over-year increase reflects institutional investors' desire to participate directly in deal selection and portfolio construction rather than relying solely on manager discretion. Concurrently, liquidity expectations have intensified, with 64% of managers reporting rising demands (up from 49% in 2023). Responding to this shift, two-thirds of surveyed managers now offer at least one vehicle with periodic redemption provisions, compared to roughly half in 2023, indicating structural adaptation across the industry.
The retail investor segment is expanding materially. Over 50% of managers currently serve high-net-worth or retail clients, and two-thirds are actively targeting retail capital for new fund launches. This democratization of private credit access reflects both investor interest and manager confidence in scaled distribution. Insurance capital remains a strategic focus, with 63% of managers having evaluated rated note feeders for U.S. insurers and 35% for European and Asian insurers—a structuring approach that bridges yield requirements with regulatory capital treatment.
Leverage deployment remains disciplined, with 72% of managers employing some form of leverage in their strategies, typically at ratios of 1.0–1.5× net asset value, applied either at the fund or individual asset level. Geographic domicile preferences remain stable, with Luxembourg, the Cayman Islands, and the United States continuing as favored jurisdictions. Collectively, these findings underscore a maturing market in which operational complexity and product diversification are rising in lockstep with investor sophistication and capital competition.
The most significant finding concerns co-investment appetite, which has surged dramatically. Ninety-two percent of managers now report increased investor demand for co-investment opportunities alongside fund commitments—a sharp rise from approximately 70% in 2023. This 22-percentage-point year-over-year increase reflects institutional investors' desire to participate directly in deal selection and portfolio construction rather than relying solely on manager discretion. Concurrently, liquidity expectations have intensified, with 64% of managers reporting rising demands (up from 49% in 2023). Responding to this shift, two-thirds of surveyed managers now offer at least one vehicle with periodic redemption provisions, compared to roughly half in 2023, indicating structural adaptation across the industry.
The retail investor segment is expanding materially. Over 50% of managers currently serve high-net-worth or retail clients, and two-thirds are actively targeting retail capital for new fund launches. This democratization of private credit access reflects both investor interest and manager confidence in scaled distribution. Insurance capital remains a strategic focus, with 63% of managers having evaluated rated note feeders for U.S. insurers and 35% for European and Asian insurers—a structuring approach that bridges yield requirements with regulatory capital treatment.
Leverage deployment remains disciplined, with 72% of managers employing some form of leverage in their strategies, typically at ratios of 1.0–1.5× net asset value, applied either at the fund or individual asset level. Geographic domicile preferences remain stable, with Luxembourg, the Cayman Islands, and the United States continuing as favored jurisdictions. Collectively, these findings underscore a maturing market in which operational complexity and product diversification are rising in lockstep with investor sophistication and capital competition.
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